An industry think tank warned that tariffs could spark a global trade war after Trump's second term in office
Recently, Trump said he would impose new tariffs if he returned to the White House.
While this is unlikely to have the desired effect at home, it will also be a drag on trade. Shippers are worried.
The Republican nominee for president seems determined to raise barriers to the international movement of goods.
Trump has floated the idea of an across-the-board tax cut to be funded by higher import tariffs, indicating a flat 10 percent tariff on all imports and up to 60 percent on imports from China.
Some experts believe the move will stimulate the U.S. economy, but most economists take a more negative view, warning that tariffs end up being a mechanism for consumers to raise prices and thus could lead to higher inflation, slower economic growth and a heavier financial burden on working families.
Tariffs imposed early in Trump's White House are estimated to have added $1 billion in annual costs.
Moreover, the desired effect of stimulating domestic manufacturing seems unlikely to materialize. Matt Priest, president and CEO of the Footwear Distributors and Retailers Association of America, commented that previous tariffs have not boosted U.S. manufacturing.
"We pay $4 billion a year in tariffs and have an import penetration rate of 99 percent," he added.
While China is the obvious target of the proposed tariffs, other trading partners will also be affected. The EIU notes that Mexico and Canada are the countries with the highest exposure after China, due to their share of trade, their trade surpluses and the extent to which politically sensitive items are involved in their exports.
Vietnam and India rank fourth and eighth respectively on the list of countries likely to be most affected.
The Peterson Institute for International Economics, a nonpartisan think tank in Washington, predicted the impact would go beyond individual economies. The institute warned that such tariffs could spark a global trade war, as such measures often trigger countermeasures.
For some industries and operators, they will pose fundamental challenges to their business models. Mr Priest commented that they would "fundamentally change the way trade is done".
Gene Seroka, executive director of the Port of Los Angeles, said it "could change the landscape and the future of the port."
Priest noted that the proposed changes would require a lengthy legislative process. For now, shippers are focusing on two other strategies - shifting production from China to Southeast Asia and rushing products to the United States before planned tariffs take effect.
Several logistics providers said the surge in seaborne imports this year was partly due to companies looking to import goods ahead of a possible change in Washington.
Other industries are less worried for now. A project carrier executive in Houston said projects typically take two to three years, so potential tariffs are largely irrelevant for current projects.
Other observers have commented that both major US political parties are showing growing protectionist tendencies. The current administration has yet to roll back tariffs imposed during the Trump administration, and both candidates advocate upgrading infrastructure projects and freight lanes.
The latest move by the current administration was an executive order issued on July 17 that decided to impose a 25 percent tariff on steel products produced outside the Marine Corps Free Trade Zone and a 10 percent tariff on aluminum products originating in China, Russia, Belarus or Iran.
Industry insiders believe that Trump's second term in power will cause a serious blow to the shipping industry, and Trump's first term is also the highest and most time point in the history of the United States to increase tariffs on China, and various "SAO operations" to restrain China's development emerge in an endless manner. So you can imagine what kind of decisions Trump will make in his second term.
While this is unlikely to have the desired effect at home, it will also be a drag on trade. Shippers are worried.
The Republican nominee for president seems determined to raise barriers to the international movement of goods.
Trump has floated the idea of an across-the-board tax cut to be funded by higher import tariffs, indicating a flat 10 percent tariff on all imports and up to 60 percent on imports from China.
Some experts believe the move will stimulate the U.S. economy, but most economists take a more negative view, warning that tariffs end up being a mechanism for consumers to raise prices and thus could lead to higher inflation, slower economic growth and a heavier financial burden on working families.
Tariffs imposed early in Trump's White House are estimated to have added $1 billion in annual costs.
Moreover, the desired effect of stimulating domestic manufacturing seems unlikely to materialize. Matt Priest, president and CEO of the Footwear Distributors and Retailers Association of America, commented that previous tariffs have not boosted U.S. manufacturing.
"We pay $4 billion a year in tariffs and have an import penetration rate of 99 percent," he added.
While China is the obvious target of the proposed tariffs, other trading partners will also be affected. The EIU notes that Mexico and Canada are the countries with the highest exposure after China, due to their share of trade, their trade surpluses and the extent to which politically sensitive items are involved in their exports.
Vietnam and India rank fourth and eighth respectively on the list of countries likely to be most affected.
The Peterson Institute for International Economics, a nonpartisan think tank in Washington, predicted the impact would go beyond individual economies. The institute warned that such tariffs could spark a global trade war, as such measures often trigger countermeasures.
For some industries and operators, they will pose fundamental challenges to their business models. Mr Priest commented that they would "fundamentally change the way trade is done".
Gene Seroka, executive director of the Port of Los Angeles, said it "could change the landscape and the future of the port."
Priest noted that the proposed changes would require a lengthy legislative process. For now, shippers are focusing on two other strategies - shifting production from China to Southeast Asia and rushing products to the United States before planned tariffs take effect.
Several logistics providers said the surge in seaborne imports this year was partly due to companies looking to import goods ahead of a possible change in Washington.
Other industries are less worried for now. A project carrier executive in Houston said projects typically take two to three years, so potential tariffs are largely irrelevant for current projects.
Other observers have commented that both major US political parties are showing growing protectionist tendencies. The current administration has yet to roll back tariffs imposed during the Trump administration, and both candidates advocate upgrading infrastructure projects and freight lanes.
The latest move by the current administration was an executive order issued on July 17 that decided to impose a 25 percent tariff on steel products produced outside the Marine Corps Free Trade Zone and a 10 percent tariff on aluminum products originating in China, Russia, Belarus or Iran.
Industry insiders believe that Trump's second term in power will cause a serious blow to the shipping industry, and Trump's first term is also the highest and most time point in the history of the United States to increase tariffs on China, and various "SAO operations" to restrain China's development emerge in an endless manner. So you can imagine what kind of decisions Trump will make in his second term.
